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5.Troubled companies

This category contains 177 posts

8 Aug 2017 (AFR) – Banks still paying for GFC – Rack up $US150b in US fines since start of the financial crisis

(8 August 2017, AFR, p29, by Kara Scannell) ‘Financial institutions have paid more than $US150 billion ($189 billion) in fines in the US relating to the credit crisis, passing a significant milestone a decade after it became clear that the country’s subprime woes had become a global problem. Ten years ago this week, France’s BNP Paribas … Continue reading

21 July 2017 (AFR) – Sales slump undermines Myer turnaround plan

(21 July 2017, AFR, p32, by Michael Smith) ‘Richard Umbers’ plan to fix Australia’s biggest department store group is being undermined by an alarming drop in sales, but the Myer boss is not…’ Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

19 July 2017 (TheAge) – Wellard shares hammered as weak Asian demand hits cattle exports

[COMMENT: Any reasonable trader/investor who likes to protect their capital would surely have had a Stop Loss exit ready for this stock (in fact all stocks), and actually exercised it. Since listing in December 2015, the share price has seen a continual downtrend (and we know from Dow Theory that a confirmed trend is likely … Continue reading

14 June 2017 (AFR) – Baby Bunting shares crunched by fear of Amazon

[COMMENT: Most technical analysts who might have been holding this stock in late 2016, would have spotted the downtrend in late 2016, which continued into 2017, and they most likely sold their position to lock in profits and preserve their capital. See the chart below.] (14 June 2017, AFR, p19, by Simon Evans) ‘In just … Continue reading

1 Mar 2017 (TheAge) – Watersun Homes goes into administration

(1 March 2017, The Age, BusinessDay, p27, Simon Johanson, Emma D’Agostino) ‘A home building company that at one stage sponsored the St Kilda Football team, Watersun Homes, has gone into administration with the loss of 90 jobs. The residential builder was working on about 300 homes in metro Melbourne and regional Victoria when it was … Continue reading

3 Oct 2016 (AFR,TaipeiTimes) – China needs to heed warnings on property

(3 October 2016, AFR, p22, By Andrew Sheng and Xiao Geng, Taipei Times) ‘Real-estate prices in China’s top cities are spiking, generating contradictory predictions of either bursting bubbles or an economic turnaround. What is really going on in China’s property market? The Chinese National Bureau of Statistics last week revealed that 10 of the 70 … Continue reading

3 Oct 2016 (AFR) – China determined to lower debt levels says top banking official

(2 October 2016, AFR, p1, by Angus Grig, Lisa Murra) ‘The Chinese government is determined to lower debt levels across the economy, but this should be done gradually to avoid a sharp slow-down in growth, according to one of the country’s most senior banking regulators. Wang Shengbang, deputy director of the Prudential Regulation Bureau of … Continue reading

30 Sept 2016 (AFR,NYTimes) – Deutsche Bank Is the Darling of the Short-Sellers

(30 September 2016, AFR, p36, By LANDON THOMAS Jr., New York Times) ‘In a market full of crowded trades, few have become as fashionable as the bet that Deutsche Bank’s stock price will keep on falling. Hedge funds, large and small, are shorting the stock. Long-term institutional investors are dumping their positions. And Wall Street’s … Continue reading

20 Sept 2016 (TheAge) – Sydney psychic advised BBY chairman Glenn Rosewall on ‘chakras and share prices’

[COMMENT: Now there might be some people who think that the considerations that are explained in this article are reasonable when it comes to managing a business; but many people wouldn’t accept this approach. The details in this article are truly eye-opening.] (20 September 2016, The Age, BusinessDay, p16, Michaela Whitbourn) ‘It is not often … Continue reading

14 Sept 2016 (AFR) – BBY management allegedly told staff not to write down finance discussions

[COMMENT: It is difficult to believe that events such as this can happen within companies that we trust.] (14 September 2016, AFR, p3, by Misa Han) ‘Collapsed stockbroker BBY was dipping into clients’ trust accounts for business purposes as early as 2012 and threatened to sack staff who refused to take money out of clients’ accounts. BBY … Continue reading

8 Sept 2016 (AFR) – Hanjin’s ghost ships seek havens as bankrupty action looms

(8 September 2016, AFR, p44, by Sohee Kim and Kyunghee Park) ‘South Korea’s cash-strapped Hanjin Shipping Co is adrift at sea – and in more ways than one. Hanjin is one of the world’s biggest shipping lines and filed for bankruptcy protection last week in Seoul. That’s created a bizarre situation on the high seas for … Continue reading

31 Aug 2016 (AFR) – Estia becomes worst stock on ASX 200 index – Estia Health share price hammered as debt concerns raised

(31 August 2016, AFR, p32, by Matthew Cranston) ‘The share price of one of Australia’s largest aged care operators and developers, Estia Health, has collapsed as investors and analysts reevaluate the company’s issues and future growth prospects. The company, which is now the worst-performing stock on the ASX 200 this year and trades with a negative net tangible assets per security, … Continue reading

31 Aug 2016 (AFR) – Surfstitch clears decks as shares dive – wiped out by $155m loss

(31 August 2016, AFR, p15, by Sue Mitchell) ‘SurfStitch chief executive Mike Sonand has promised to return the online retailer to profit after a horror year in which it shredded more than $500 million in shareholder value and lost $155 million, two chief executives and a chairman.’ Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

30 Aug 2016 (AFR) – Temple & Webster loss blows out to $44m

(30 August 2016, AFR, p13, by Sue Mitchell) ‘Online furniture retailer Temple & Webster is cutting costs and tweaking marketing and discounts after losing a staggering $44.4 million in 2016, cementing its status as the worst float of the year. The loss was more than double the $18.5 million loss forecast in Temple & Webster’s … Continue reading

4 Aug 2016 (AFR) – HSBC’s first-half profit skids 29pc on Britain, Hong Kong slowdown

(4 August 2016, AFR, p18, Reuters) ‘HSBC said on Wednesday its core first-half profit fell 29 per cent, slightly below estimates, as revenue at Europe’s biggest bank was hit by slowing economic growth in its key markets of Britain and Hong Kong.’ Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

29 July 2016 (AFR) – Confidence down, Mayor frets as banks put bite on Whyalla house buyers

(29 July 2016, AFR, p3, by Simon Evans) ‘The acting mayor of Whyalla says confidence has been shredded in the stricken steel town, with some banks demanding hefty deposits for house purchases, while proposed wage cuts would hit discretionary spending as small businesses teeter on the verge of collapse. Marathon negotiations between Arrium’s administrators KordaMentha and unions were held on … Continue reading

24 June 2016 (TheAge) – Macquarie to face penalties over van Eyk fund

(24 June 2016, The Age, BusinessDay, p22, Clancy Yeates, Banking reporter, View more articles from Clancy Yeates) ‘Macquarie Investment Management concedes it did not do enough as responsible entity to assess the risks in a fund run by van Eyk, which collapsed in 2014 after investing $30 million in a Cayman Islands fund. The Australian Securities and Investments … Continue reading

20 June 2016 (TheAge) – Cattle exporter Wellard joins list of worst IPOs this year

(20 June 2016, The Age, BusinessDay, p19, Colin Kruger, CBD, CBD columnist, View more articles from Colin Kruger, CBD) ‘Cattle exporter Wellard is joining SurfStitch and Slater and Gordon as one of the worst IPOs of recent times.  The company’s shares are worth a fraction of what investors paid prior to its initial public offering after … Continue reading

18 June 2016 (AFR) – Receivers appointed to $160m of Queensland shopping centres

(18 June 2016, AFR, p38, by Matthew Cranston) ‘More than $160 million worth of shopping centres across south-east Queensland have been placed in receivership and one of Asia’s largest alternative investment management firms is closing in on buying more than $100 million of the debt behind the assets.’ <snipped…> ‘Receiver PPB Advisory’s Brett Lord, who handled Lehman Brothers Real Estate … Continue reading

2 June 2016 (AFR) – RiverCity IPO investors secure $121m in successful Clem7 class action

[COMMENT: This is a good example of one way in which the honest and well-meaning investor can lose a significant amount of their investment, all in one go.] (2 Juen 2016, AFR, p30, by Jenny Wiggins) ‘Investors who bought shares in Brisbane’s Clem7 tunnel, which went into receivership in 2011, have won a $121 million … Continue reading

30 May 2016 (AFR) – Tiffany struggles as tourists turn off

(30 May 2016, AFR, p21, Financial Times) ‘… Jeweller Tiffany saw its sales dip 3 per cent in 2015. The tourist malaise has extended to Europe and Hong Kong, too.  The company had already damped down expectations for the year, but first-quarter results reported this week failed to meet even the lowered targets.  Overall sales dropped … Continue reading

19 May 2016 (AFR) – Soft sales dim Beacon Lighting outlook as shares plunge

(19 May 2016, AFR, p23, by Catie Low) ‘Shareholders turned the lights off on Beacon Lighting Group on Wednesday after the listed retailer blamed soft consumer confidence for a sales slowdown, triggering a vicious share sell-down. The stock plunged more than 30 per cent…’ Read more at AFR.com (might need AFR login access, or try: … Continue reading

5 May 2016 (TheAge) – BHP Billiton shares dive following Brazil lawsuit

[COMMENT: For all of the investors who believe in holding onto shares for the long term, and that a big blue chip company can’t go broke, this ongoing news story is an absolute classic. The moral of the tale is that even a large so-called blue chip like BHP Billiton can have a catastrophic event … Continue reading

2 May 2016 (AFR) – Clock ticking for small Arrium creditors

(2 May 2016, AFR, p3, by Tim Binsted) ‘Complex administrations take time, but sadly for small Arrium creditors like Steve Donald, time is a luxury they may not have. When Arrium collapsed in April, it set in train one of the most complicated administrations in Australian corporate history, with some staggering numbers. In total, 94 entities are … Continue reading

20 Apr 2016 (AFR) – Papua New Guinea’s dollar crisis leads to loan plea

(20 april 2016, AFR, p31, by Jamie Smyth) ‘Papua New Guinea is seeking a World Bank loan of hundreds of millions of dollars to tackle a foreign exchange crisis linked to a slump in oil prices, a severe drought and a ballooning budget deficit. The move to borrow $US300 million ($390 million) follows the country’s … Continue reading

20 Apr 2016 (AFR) – Argentina finally returns to international bond market

(20 April 2016, AFR, p10, by Jonathan Gilbert) ‘Argentina returned to global bond markets on Monday after a 15-year hiatus, unveiling the biggest sovereign issuance by an emerging-market nation in two decades as the government ends a prolonged feud with hedge funds in New York. The country was receiving offers from investors for its sale … Continue reading

12 Apr 2016 (AFR) – Huge bankrupt China steel mill to reopen as mills in Australia, Britain face axe

(12 April 2016, AFR, p9, by Lisa Murray and Angus Grigg) ‘One of China’s largest private steel mills, which went broke two years ago, could reopen this month, worsening the outlook for Australia’s struggling steel producers. During its heyday, Haixin Iron and Steel Group produced about 5 million tonnes of steel a year, which was more than … Continue reading

8 Apr 2016 (TheAge) – Arrium board hands the keys to administrator Grant Thornton

(8 April 2016, The Age, BusinessDay, p21, Simon Evans, Senior Reporter, View more articles from Simon Evans) ‘Federal Labor leader Bill Shorten has proposed that government invest alongside industry to ensure Australia still has the capability to make steel after one of the two remaining steel mills went broke. Mr Shorten offered to commit taxpayer funds … Continue reading

12 Mar 2016 (AFR) – Slater & Gordon dropped from the ASX200

[COMMENT: The constituent stocks of the market indexes are reviewed periodically – known as the index rebalance. Some indexes are reviewed quarterly. See the latest news announcment from Standard & Poor’s to see which other stocks are off the index, and which ones come onto the index.] (12 March 2016, AFR, p7, Sarah Danckert, SMH) … Continue reading

9 Mar 2016 (TheAge,SMH) – Masters suppliers raise payment concerns

(9 March 2016, The Age, BusinessDay, p21, Sue Mitchell, Senior Reporter, View more articles from Sue Mitchell) ‘Payment problems at Woolworths’ loss-making Masters chain may have contributed to the collapse of one of its suppliers, 60-year-old family-owned hardware company Otter Group. Otter, which makes and supplies nails, screws, rivets, wire fencing and balustrades, went into receivership on Friday after experiencing … Continue reading